The Federal Reserve Bank of New York found that tariffs imposed in 2025 accounted for all price increases on many commonly purchased goods. Its analysis also found that US companies and consumers paid 90% of the added tariff costs, as exporters largely held prices steady and the expense travelled through importers to shoppers. The findings matter because they challenge the idea that foreign sellers absorbed most of the cost.
Tariff rates climbed sharply in 2025
The New York Fed research puts the average tariff rate on imported goods at 13% in 2025, up from 2.6% at the start of the year. That change increased the cost of bringing affected products into the United States, creating a new expense for businesses that rely on imported goods.
The reported price effect was not uniform across the full range of household purchases. The Federal Reserve’s analysis of retail prices says its product coverage was limited and could not represent the complete household basket. The New York Fed’s conclusion is therefore specific: tariffs explained all of the observed increases for many everyday goods, not every price increase across the economy.
US buyers bore most of the added cost
The New York Fed estimated that 90% of the cost of increased tariffs fell on US firms and consumers. The account of how that burden moved is straightforward: exporters maintained their prices, importers faced the tariff bill, and some of that higher cost was reflected in retail prices.
That division matters for shoppers as well as businesses. An importer may initially pay the duty, but a company that raises its selling price can pass the burden along to retailers and customers. Where businesses instead absorb some of the increase, their costs rise even if the shelf price does not immediately change. The finding points to domestic buyers and firms as the main bearers of the tariff expense.
Economists see near-complete pass-through
The National Bureau of Economic Research also found that tariff pass-through was “almost 100%.” In other words, the tariff increase was largely reflected in costs paid inside the United States rather than offset by lower prices from exporting countries.
Taken together, the New York Fed’s 90% estimate and the NBER finding describe a similar pattern: foreign exporters did not absorb most of the new charges through price cuts. For US importers, the result is a higher landed cost; for consumers, it can mean more expensive goods. The evidence does not mean that every tariff produces an identical retail increase, but it does indicate that the burden can remain largely at home.
Price effects differ by product
Separate Federal Reserve analysis says the estimated effects varied widely among goods. Furniture, motor vehicle parts and musical instruments were among the categories with some of the largest predicted tariff-related price increases, while fuels and books showed much smaller effects.
Those differences help explain why the New York Fed’s finding focuses on many everyday items rather than claiming a uniform rise in all prices. Products differ in their exposure to imports and in how costs move through supply chains. A broad tariff-rate increase can therefore produce pronounced changes in some categories and limited effects in others.
What the finding means for households
For households, the immediate implication is that tariffs can contribute to higher prices on frequently purchased goods even when overseas suppliers keep their own prices unchanged. The 13% average rate reported for 2025 is an economy-wide figure for imported goods, not a percentage increase that should be applied directly to every item in a shopping basket.
For businesses, the choice is whether to pass the added cost on, absorb it, or adjust other parts of their operations. The New York Fed’s analysis identifies consumers and US companies as carrying most of the burden, while the Federal Reserve’s limited product coverage leaves the full effect on household spending unresolved. The findings establish the direction of the cost transfer without implying that every retailer or product responds in the same way.
Takeaway: The New York Fed says tariffs drove all price increases on many everyday goods in 2025, with US firms and consumers paying most of the bill.
References
- BBC — “Costs from Trump's tariffs paid mainly by US firms and consumers, NY Fed says”
- federalreserve.gov — “The Fed – The Slow Climb: How Tariffs Gradually Raised Retail Prices in 2025”
- stlouisfed.org — “How Tariffs Are Affecting Prices in 2025”
- governor.ny.gov — “[PDF] NYS Tariff Disruptions Report – Governor Kathy Hochul”
- Part II — “Detecting Tariff Effects on Consumer Prices in Real Time”
